Blueshore Global pin Game’s recovery on console cycle

In the UK the biggest computer game retailer – GAME – is having a horrible time. They seem to be at death’s door given that key suppliers like EA, Sega, Nintendo and Microsoft are now refusing to sell stock to the shop. Only Sony and Activision seem faithful. Do Codemasters count?

At one point it looked as if GAME had turned the corner. In February they seemed to have struck a deal with their biggest lender, RBS, to restructure their debts and keep going. That was before the publishers started to walk.

What went wrong?

Ben Parfitt of MCV UK suggests that it was GAME’s insistence that it should be allowed to stock games at a discount that pushed the publishers away.

That increased the risk. Sure, GAME accounted for about 50% of all PS Vita sold but does that mean publishers need to supply titles like Mass Effect 3, in large numbers, at a discount to someone who might never pay the bill? No. It seems clear that publishers are betting companies like ShopTo, Amazon and Play.com can make up the difference. It’s not as if the only high street alternative is HMV either; supermarkets like Tesco and ASDA also sell games.

It’s not all bad news for GAME though – they might be bought. That would save some of the 6,000 jobs Game Group (aka GAME and GameStation) have in the UK. Early talks mentioned the US GameStop but they’re not keen on some of GAME’s international branches. Even ASDA’s owner Walmart is rumoured to be interested.

There’s also Opcapita. They’ve expressed an interest.

OpCapita are an interesting company to geeks. They’re the people who bought Comet for £2. That meant they took responsibly for Comet’s debts but gave them the brand and all those stores. It’s easy to see why they might be interested in GAME – especially if they’re expert in turning around struggling companies.

However, some companies have already bought GAME shares. They bought them when GAME looked to be on the verge of failure and shares where less than 1p each. One such company is Blueshore Global.

Blueshore Global’s Harsha Gowda said;

“It just needs to ride out the current downturn in the console cycle.”

Really? GAME, of course, benefits when there’s a new console because people need to buy it. There are gamers who are happy buying spinny discs online but who might want to visit a physical location to buy a console (witness the queues outside Apple stores for the new iPad release). It also means that Christmas ensures loads of new hardware is sold.

It’s also the case that a new console means new games. GAME benefits from that.

My concern, the reason why I doubt that key line from Blueshore, is that there’s a strong chance the next gen of Xbox or PlayStation may do without discs all together. If the next new gen console is a Steambox then that’ll be true.

There’s no guarantee that the launch of the next gen of consoles will look anything like the previous launches. Do Blueshore get this? Are they close enough to market to understand this?

I think it may be foolish to hope that hardware can save the high street computer game market. There needs to be an evolution of the model rather than a waiting game. I need reason to drag myself into a store (and, actually, GAME staff are often great and useful to walk to) rather than just download what I need.